Mid-term Evaluation of the Access2Access (A2A) Programme Mid-term Evaluation of the Access2Access (A2A) Programme Evaluation Report 11 March 2020 Mid-term Evaluation of the Access2Access (A2A) Programme EXECUTIVE SUMMARY INTRODUCTION Access Microfinance Holding AG (AccessHolding) is a private company, incorporated in Germany, that operates an international network of eight Network Financial Institutions (NFIs) in Sub-Saharan Africa (SSA), Central Asia and South America, in the following countries: Madagascar- AccèssBanque Madagascar (ABM), Tanzania- AccessBank Tanzania (ABT); Georgia- Credo Bank; Liberia- AccessBank Liberia (ABL); Rwanda- AB Bank Rwanda (ABR); Brazil- AccessCrédito; Nigeria- AB Microfinance Bank Nigeria (ABN); and Zambia- AB Bank Zambia (ABZ). The mission of the financial institutions of AccessHolding is to be the preferred bank of choice for low- and middle-income families in their countries of operations. This mission is achieved through the provision of transparent, well-tailored products to ensure high quality financial services are delivered through these NFIs. In a bid to strengthen the capacities of the NFIs to efficiently and profitably reach a wider share of their target market segments and achieve a wider geographical spread of customers, AccessHolding launched the Access2Access (A2A) programme in 2016. A partnership agreement was formed between AccessHolding and Mastercard Foundation (MCF), initially for a period of five years, which has since been extended to six years and will conclude in June 2022. The A2A programme is equally supported by AccessHolding’s own contributions and an MCF grant. The partnership focuses on the three youngest institutions in Africa: ABL, ABZ and ABR. The partnership between MCF and AccessHolding was formed at a time when the Holding was developing its new strategy for the years 2017 to 2021, which reinforced AccessHolding’s commitment to its mission statement to provide financial services to small entrepreneurs and their families while enabling the group and the Holding to accelerate their growth. Therefore, while the partnership between MCF and AccessHolding was focused on ABL, ABZ and ABR, all NFIs are implementing the A2A programme. The goal of the A2A programme is that low- and middle-income businesses and households in urban and rural areas in the target countries in SSA have increased access to and use responsible financial services. The programme has two components: digitalisation and capacity building, each with their own activities and purpose: · Digitalisation: The aim of the digitalisation component is to improve NFIs internal efficiency, and build a solid, scalable, flexible and secure IT architecture, as well as to broaden the range of channels, products and services that customers can access, and improve efficiency in service delivery; and, · Capacity building: The capacity building component is built on a competency based human resources model, which takes a holistic approach to people development. It focuses not just on the tasks and outputs of a role but also on what behaviours need to be demonstrated when completing tasks. Skills development is conducted in three complementary areas: (a) AccessCampus: provides the necessary education for bank middle-managers to perform more senior managerial roles in their NFIs; (b) AccessFoundation: while not included in the initial proposal for the partnership, AccessFoundation was created in 2017 with the purpose of providing a foundation of knowledge and capacities to middle managers, thereby preparing them for AccessCampus; and (c) AccessMind: an internet-based platform was created to allow staff from NFIs to enrol and take fully customised eLearning courses on a wide variety of subjects relevant to their jobs and career paths. Together, the two components of the A2A programme ensure that not only do NFIs have the hardware and software required for efficient and secure institutional process, but the intensive and diversified capacity building initiatives qualify staff to manage complex changes related to the introduction of digital products and services, and to put the customer in the centre of all developments. In September 2019, mid-way through the partnership period, Genesis Analytics (‘Genesis’) was appointed by AccessHolding to conduct a mid-term evaluation of the A2A programme. The purpose of this evaluation is to understand the performance and outcomes of the programme till the mid-point of the programme (30 June 2019), in order to document key learnings arising from implementation, and to identify areas for improvement. However, given that a lot of progress in implementation was made in the subsequent months, the evaluation reports on findings that go beyond Page 2 Mid-term Evaluation of the Access2Access (A2A) Programme June 2019. In doing so, it is hoped that this evaluation will inform the implementation and strategic direction of the programme for the remainder of the partnership period. For the digitalisation component of the A2A programme, the evaluation focused on the implementation in ABL and ABZ, while for the capacity building component of the A2A programme, all African NFIs: ABM, ABT, ABL, ABR, ABN, and ABZ were included in the evaluation. The mid-term evaluation used a mixture of qualitative and quantitative data collection methods, where the evaluation team undertook country visits to Liberia and Zambia, and primary data collection was predominantly qualitative, but was triangulated against secondary quantitative data collected as part of the A2A programme. The following data collection methods were used: · Document and data review · Key informant interviews with AccessHolding, MCF staff, and staff of ABL and ABZ · Focus group discussions with staff and clients · Online survey with staff who have received training from the capacity building component of the programme · A total of 119 participants were involved during the evaluation process. COUNTRY CONTEXT Since its inception, the A2A programme has made significant progress towards achieving the programme objectives. The programme’s strengths have been AccessHolding’s learning culture and its ability to adapt programme activities to address macro-level and contextual challenges in countries of implementation, and to cater to emerging needs of NFIs. The programme has also invested in maintaining the quality of both digitalisation and capacity building components of the programme, and given external or internal factors affecting the programme any delays in the programme’s implementation would be necessary to ensure that the quality of the programme is not compromised. Each of the NFIs under the partnership of the A2A programme have faced a number of changes in their external operating context: · In Zambia, though copper prices have improved since the beginning of 2016, Zambia’s economy which has a narrow export base largely composed of copper, has not yet recovered from the copper price slump in 2015. Economic growth has remained at about half of what it was before 2013. Full economic recovery has partly been hindered by the subdued rainfall the country has had since 2018. This led to a contraction in agricultural output by 14 % in 2018. Electricity supply has also been severely affected by the subdued rainfall, as 96% of the country’s electricity generation capacity is from hydropower. The country has therefore experienced electricity rationing affecting households, Micro Small and Medium-sized Enterprises (MSMEs), mechanised farms as well as mining plants. The effect of this has not only been a reduction in output amongst businesses and manufacturers, but also an increase in the cost of inputs. This has likely led to strained cash flows amongst businesses, reflected in the rising NPL ratios for Zambia’s banking sector. The other factor that has contributed to the relative decline in lending to the private sector by commercial banks is the government’s appetite for debt that has ballooned, which has had a significant negative impact on liquidity levels in Zambia’s economy. · In Liberia, ABL operates in a strenuous political, economic and social context. Liberia’s history of civil war left many institutions, including education, in dilapidated state, which has resulted in low qualification and inadequate people to employ to key positions in institutions. Strained economic and political times over the past decades have resulted in decreased capacity of human capital, and potentially affected people’s desire for learning. The country’s economy is yet to fully recover from the Ebola crisis the country faced in 2014 and 2015, as well as the collapse of commodity prices in 2015. In the first year of the Ebola crisis, economic growth fell to 0.7%, from 8.7% in 2014. Following the end of the crisis and the rise in commodity prices in 2016/2017, economic growth picked up, rising to 2.5% in 2017, from -1.6% in 2016. However, with commodity prices, more so iron ore and rubber prices, remaining rather low, the completion of the UN peacekeeping mission in Liberia in 2018 and declining aid inflows after the Ebola crisis, economic growth remained low at 1.2% in 2018. Page 3 Mid-term Evaluation of the Access2Access (A2A) Programme · Rwanda’s economy has been one of the fastest growing economies in SSA with largely sound macroeconomic fundamentals. The financial sector has been a key contributor to the economic growth the country has experienced, growing at an average of 7.4% p.a. in the last five years with a slightly volatile but low inflation rate